The FINANCIAL — Together 100 of the world’s largest companies reported social investments valued at over US$12.2 billion in 2013, according to new research published by KPMG International. Yet few companies are reporting the impact these investments are actually having on the people they are intended to help.
The KPMG study reviewed corporate reports issued between 2012 and 2013 by the 10 largest global companies in each of 10 industry sectors. It found these 100 companies and their associated corporate foundations invested, on average, the equivalent of 2.5 percent of their pre-tax profits in programs to tackle social and environmental challenges such as access to education, healthcare and disaster relief.
However, only 20 percent of these companies reported any quantified metrics for the impact of the programs they fund and only 32 percent of companies reported a detailed investment strategy, according to KPMG.
“Companies are investing huge amounts into social programs,” said Neil Morris, Partner, Climate Change and Sustainability of KPMG in South Africa, who led the KPMG study. “The US$12.2 billion invested by these 100 companies alone is equal to the entire annual foreign development aid budget of a country like France," Morris added.
“Measuring the impact of these investments on the ground can be challenging, but it is crucial to understand how effective these programs are, how they can be improved and where the money is best spent to deliver the biggest benefits. A clear strategy for social investment is essential to this process,” Morris said.
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